Time to play the evil landlord

It's been well over a year since I last did the 'annual' rent review for our investment property. Today the latest official rental statistics were available online from the NSW Dept of Housing, and our tenants won't be happy with the news. According to 'Table 3:Weekly rent for new bonds- Greater Metropolitan Sydney -Separate houses - 3BR, Warringah Shire' for the Dec '08 quarter, the average weekly rent for the bottom quartile of new rental agreements was $571 per week. That's an increase of 16.4% compared to when I last adjusted our rent (based on the Sep '07 figures). The last rent increase for our rental property was also in double digits, so our tenants negotiated for the rent to be raised in two stages, with the full rent increase only coming into effect after a six month delay.

This review we've decided to again raise the rent for our property by less than the market average, but it's still a hefty 15.5% rise from the current $450 per week to $480 from 1 June and then to $525 from 1 Dec. I'm sure our tenants will complain about this rent hike and try to negotiate a smaller increase, but I really don't want to let the rent fall too far below prevailing market levels. Even when the full increase comes into effect in December the rent will only be 91% of the average rent for similar properties in this area as of last December, and I'm sure rents will have risen further by the time the increase comes into effect at the end of the year, given the low vacancy rates in Sydney, the slump in new home construction, and record high immigration rates with Sydney the destination of choice for the majority of immigrants to Australia.

When we first purchased the property we set the rent based on expert advice from local rental property managers, and the rent was 98% of the relevant market average. Since then our rent has slowly fallen behind the curve, as shown below. Consistently getting 10% less than market rent is the equivalent of having the property vacant for 5 or 6 weeks of the year.

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Wealth. Copyright 2006-2008

Online businesses need more time than money

My annual domain name registration for a couple of my online business ideas fell due yesterday - FreeHeraldry.org and PickingBabyNames.com

I think both of them are worth keeping, so I stumped up the $13 or so renewal fee for each (Dotster is not the cheapest registration option around, but I can't be bothered trying to transfer them to another service). I've been getting a few hits on freeheraldry.org even though there is no content there as yet, so I think it has potential for generating some AdSense revenue if I load up the site with useful content. But the fact that I still haven't got around to doing anything with the site twelve months after I first registered the domain shows that it won't be easy to convert a good idea into a money spinner. At least I did take a lot of great digital photos of heraldy in various churches and castles while I was on holiday, so I now have some original content to upload! Now I just need to find the time to work on articles and artwork for the site...

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How I saved a few bucks on domain name renewals

Four of the domain names I have registered via Dotster were due for renewal in the next month or so. The normal fee for one year .com domain renewal with Dotster is $15.45 but I used the "NVU" coupon code I found at retailmenot.com to get a 15% discount off the price - a saving of $9.27 for about two minutes spent searching for the discount code. Now I just need to find the time during the next year to create the websites for two of these domains that are currently unused. At a bare minimum I'd like to have enough useful content to establish them in the search engines and attract enough traffic to cover holding costs via some passive AdSense revenue.

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Alternative/Passive Income Week

Last week was a good one for 'passive' income. A cheque from Primary Healthcare arrived for the takeover of my Symbion shares ($11,664) and the half-yearly dividend payment season was in full swing, so I received $4,298.71 by direct deposit into my credit union savings account:

26/03/2008 LLC $ 206.83
26/03/2008 QBE $ 394.55
28/03/2008 APA $ 12.76 
28/03/2008 APA $ 679.33
31/03/2008 AEO $ 56.20
31/03/2008 WPL $ 121.00
01/04/2008 SYM $ 144.00
01/04/2008 BSL $ 171.82
01/04/2008 SUN $ 500.76
01/04/2008 BBI $ 4.62
01/04/2008 BBI $ 9.82
02/04/2008 FGL $ 450.12
02/04/2008 CBA $ 146.90
04/04/2008 TLS $1,120.00
04/04/2008 TLS $ 280.00

However I don't count this as disposable income as it all needs to be reinvested (the takeover payment) or used towards the interest payments on my margin loans (the dividends).
Copyright Enough Wealth 2008